From Z-List to A-List: The rise of Koch Media

Having built and acquired some blockbuster brands, Koch Media has seen itself move from the supplier of niche PC and Wii titles to a global player in both video games and movies.

MCV speaks to CEO and founder Klemens Kundratitz to discover exactly how the European giant has changed, and what happens now…

Saints Row IV was No.1 for four weeks in the UK. Is this now your biggest ever franchise?

Yes, it’s right up there together with Dead Island. That title had a different history. It broke with a trailer, then excitement of the trailer turned to excitement about the game, and it then had a very long and successful time at retail. Saints Row IV is a much bigger, a more ambitious project. One of the concerns was that people would not see it as a full-game, that it was just DLC, which is a confusion from the THQ days. It is absolutely a fresh game, and consumers and opinion leaders like Edge and Destructoid, clearly saw that.

Historically Deep Silver has not had many global hits until Dead Island came along. Did that game prepare you for Saints Row?

Dead Island was the key to international recognition. After that we were recognised for that one game, and many people applauded us for that. But I think everybody was thinking: ‘Is this company going to deliver more than that?’ We can now demonstrate with Metro and Saints Row that we have lots of triple-A products. And there is more to come.

Were you pleased with the performance of Metro:?Last Light?

We were pleased with the result. It launched during a very quiet time of the year. It went No.1 in most Western territories. It doesn’t compare with the numbers of Saints Row and Dead Island, that is very clear. It is very strong digitally, and overall it has been a critically and commercially popular project. It was definitely stronger than Metro 2033, so there will be more to come. It is a brand on the up and you will see what we are doing there.

"Dead Island was the key to international recognition.After that we were recognised for that one game, andmany people applauded us for that. But I thinkeverybody was thinking: ‘Is this company going todeliver more than that?’ We can now demonstratewith Metro and Saints Row that we have lots oftriple-A products. And there is more to come."

Klemens Kundratitz - CEO and founder, Koch Media

How has Koch Media changed as an organisation now the THQ assets have been integrated into the business?

We are now being recognised as a viable publisher, whereas in the past we were seen more as a distributor. But essentially I would say we have always been a publishing house for film and games. Many years back we primarily did third party products, but now we are combining our local publishing and distribution activities with publishing and developing our own IPs. So the acquisitions we made this year were not a disruptive development, but very much an organic one. We are in an expansion phase and that will continue.

Are you planning to build or acquire new studios?

We are an IP-centric publisher, and new studios come secondary to that. Making our IPs strong on as many screens as possible our goal first and foremost. If other studios come along with that, then we will have to see. We are very happy with [new studio acquisition] Volition, that relationship is a strong one and has a lot of energy in it. We give them a lot of creative freedom, but also a lot of publisher support. And equally they are very excited to be part of Deep Silver, because it just works for them and their mindset.

We felt that Dead Island is a brand that attracts huge attention from a diverse and mainstream audience. And we felt the excitement about melee combat first-person zombie gaming can be extended into different game types. We have shown with Riptide that we can have two games in the series, and Epidemic is a new Dead Island experience altogether. So step-by-step we are filling up a full IP universe with games.

Is mobile a part of that IP universe concept?

We have nothing to announce, but yes it could include mobile games going forward, too.

Dead Island, Saints Row and Metro are big global brands. But Koch Media historically used to release games targeted at specific markets. Will you still be doing that sort of thing?

Yes. For example, here in Germany we still have a very active adventure game market. We have our adventure game series Secret Files which has an upcoming spin-off, Secret Files: Sam Peters. Lost Horizon is another adventure game that we have a follow-up for. We are not as well-known for it, but we are strong in the singing game sector with Let’s Sing. These karaoke games are not popular everywhere, but in some markets they have enormous potential. So yes, there are global brands we are working on, but we won’t neglect local ones.

When will we hear about your plans for the next-generation?

We have never been a publisher that has jumped on new platforms immediately. I don’t believe it is right for us as a company. But that does not mean we are less excited about next-gen. It is a matter of where do our gamers play and on which platform, because that is where we will make the games. Next-gen will certainly be part of Deep Silver’s future.

So you’re excited about next-gen?

Of course. Games are an exciting industry. Look at Gamescom – 340,000 people went over five days. There is so much energy and interest in this media platform. You don’t see films and music that draw such a crowd. Excitement of our gamers thrills us, and the anticipation of great games on new platforms will give us great opportunities as a publisher to bring our IPs to a willing audience.

Your name is cropping up ahead of movie trailers now and you’re holding film premieres. How have you managed to escalate your film business so fast?

That part of the business is on its own steep growth course as well. It is entertainment at the end of the day. Our move from home entertainment to a cinema business is just a natural step for us. We took the step from being a single territory operation to a multi-territory European business last year. Now we are moving from more niche titles to mainstream feature films. It’s not disruptive. Just like in games on a global level, we are equally ambitious to become a relevant player in film on a European scale.

"We really hope Nintendo can increase its hardwarepenetration going forward. Our relationship withNintendo is a healthy one, and there is nothingbroken there. But as a third-party publisher, witheach project you must consider your target audienceand where they are playing. And so far there hasn’tbeen an opportunity for us on Wii U. But that’s justfor now. If Nintendo can get the install base up to thelevel we need, we will look to publishing on Wii U as well."

Klemens Kundratitz - CEO and founder, Koch Media

Is there anything in film you’ve learnt that you’ve been able to transfer across to games?

We are learning constantly. With a blockbuster game like Saints Row, there are lessons we have learnt from the film side in creating buzz and awareness. Video games and film share a lot in common when it comes to creating excitement.

Historically Koch has had a close relationship with Nintendo platforms, but your support for Wii U and 3DS has been light. Are you looking at these platforms?

We really hope Nintendo can increase its hardware penetration going forward. Our relationship with Nintendo is a healthy one, and there is nothing broken there. But as a third-party publisher, with each project you must consider your target audience and where they are playing. And so far there hasn’t been an opportunity for us on Wii U. But that’s just for now. If Nintendo can get the install base up to the level we need, we will look to publishing on Wii U as well.

After a very busy year in 2013, what can we expect next year from Koch Media?

We are firing on all cylinders in all three areas: video game publishing, film publishing and our third-party business. As we transition as an industry from a physical dominated business to a hybrid business, we are also transitioning as a company. You can expect more big games from us, more big films and we’ll certainly stay truthful to our long-standing partnerships with other publishers to bring their products to market. Altogether don’t expect changes to the business model any time soon, we are very successful at what we do, and we hope we stay that way.

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